The US overtook China as the global cryptocurrency mining capital at the end of August, according to new data from the Cambridge Bitcoin Electricity Consumption Index (CBECI).
At a 35.4% hash rate, the US produces nearly twice as much cryptocurrency as the next closest country, Kazakhstan. The Russian Federation mines the world’s third-highest total of cryptocurrency with an 11% hash rate, the data compiled by Cambridge University’s Judge Business School (JBS) shows.
Several popular cryptocurrencies are trading higher on Wednesday. Bitcoin is up 2.34% at more than $57,000 late afternoon, while other assets like Ethereum and Cardano were up 0.82% and 1.18%, respectively.
It is the speed, or hash rate, that determines how fast a miner can solve the puzzles, add the unit of currency to the blockchain ledger and receive the cryptocurrency in return.
Crypto crackdown in China
The US overtook China as the world’s leading crypto miner after Chinese regulators outlawed cryptocurrencies in June. This produced an immediate hash rate decline of 38%, according to CBECI.
Data from several mining pools such as BTC.com and Foundry confirmed that cryptocurrency mining activity in China is “effectively zero,” the JBS report says.
However, the report also detailed a 20% “bounce-back” that occurred shortly after the ban went into effect, suggesting that some Chinese mining equipment was successfully redeployed overseas.
This redeployment is one reason why JBS expects the global hash rate to fully recover by the end of October, according to the report.
“If the August data updates are an indication for the future, then that recovery will likely be further distributed predominantly between the largest share gainers – US, Kazakhstan and the Russian Federation,” the report says.
Outside of the top three
Outside of the top three, countries like Canada, Ireland and Malaysia are also seeing increases in their hash rates since the crackdown in China occurred.
Canada has the fourth-highest hash rate at 9.6% as of 31 August, the report says. Ireland and Germany each hold a 4.68% and 4.59% hash rate, respectively.
The next CBECI update is also expected to show continued growth trends for each of these countries as well, according to the report.
However, the report has a caveat that the growing hash rate may be due to miners rerouting their virtual private networks (VPNs) through the countries rather than relocating their operations to those countries.
“It is worth noting that the shares for Ireland and Germany are likely due to a growing number of miners rerouting through those countries via VPNs or proxy servers, rather than growing mining activity for which there is little or no evidence,” it concluded.